Total manufacturing cost=Direct material + Direct Labor + Factory Overhead
30,000=15000+x+5000
So x=Direct Labor = 10,000
Now, Prime cost= Direct Material + Direct Labor
Prime Cost = 15000 + 10,000 = 25,000
Or
Total manufacturing cost + Direct Labour cost - direct Material cost
30,000 + 5,000 - 15,000 = 25,000
On Tue, Nov 22, 2011 at 11:15 PM, mc090404633 Muhammad Asif Rasool <mc090404633@vu.edu.pk> wrote:
yes it is 100% correct to calculate direct labour cost subtract Direct Material Cost and Factory overhead cost from Manufacturing Cost
On Tue, Nov 22, 2011 at 8:16 PM, Misbah Yousuf <mc080404066@vu.edu.pk> wrote:
--If:
- Direct Material Cost is Rs. 15,000
- Factory overhead is Rs. 5,000
- Manufacturing Cost is Rs. 30,000
Then:
What is the amount of Prime Cost?
۩ Rs. 25,000
۩ Rs. 20,000
۩ Rs. 35,000
۩ Rs. 45,000
Prime/Basic Cost = Cost of Direct Material Consumed + Direct Labor cost.
Direct labour cost is not given here. Do we need to subtract FOH and direct material cost from manufacturing cost?
I am little confused, please clear me.
--
Regards,Misbah Yousuf
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Regards,
Misbah Yousuf
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